There is much you can do to protect your young children with estate planning.  However, if you do not have an estate plan, the court will interfere and your children could be placed into foster care.  In addition, their assets may be seized by creditors, divorcing spouses, and predators.

First, you need to make a will and appoint guardians to raise your children in case of your death.   Be sure to name contingent guardians as well, in case your primary guardians are unable or unwilling to serve when the time comes.  This avoids family fights, especially if more than one person steps forward to care for the children.  And it avoids your children being placed into foster care if no one steps forward to care for them.

Second, make provisions for trust shares for your children in your revocable living trust.  Appoint primary and contingent trustees of your children’s trusts.

These trust shares can be designed to:

• Avoid court interference since minors can’t inherit or own property.
• Avoid seizure by creditors and divorcing spouses.
• Avoid predators by saying, “It’s all tied up in trust.”
• Avoid disqualification of special needs beneficiaries from governmental assistance.
• Avoid assets going directly to drug, alcohol, or gambling addicted beneficiaries.
• Avoid having assets go outright to children at age 18.
• Have children serve as co-trustees as they get older.

Third, execute a first responder authorization so that trusted friends and neighbors are authorized to stay with your children in the event of emergency.  This prevents your children being placed into foster care.

Fourth, execute a stand-by guardianship authorization, appointing the same guardians you named in your will, as guardians during your lifetime in the event you become incapacitated.  Your will isn’t effective unless you’re dead.

Fifth, write your children a love note, designate a special personal item for each of them, and make sure you are in photographs with them.  Tell them you love them.

To protect your young children with estate planning, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Minimizing or eliminating taxes triggered by asset transfers at death is a common estate planning goal. Estate planning attorneys often get the question,  “Will my beneficiaries have to pay death taxes?”  We’ll answer this question below.

First, we’ll clarify that it’s your estate that owes any applicable taxes at your death.  Your beneficiaries don’t pay the taxes; an inheritance doesn’t trigger income taxes (unless the inheritance is a retirement account and assets are distributed out of the account.)  All death related taxes will be paid before your beneficiaries receive their inheritances.

Second, the term, “death taxes,” usually refers to the federal estate tax, so we’ll talk about that.  There are other transfer taxes that may be triggered at your death, depending upon the size of your estate, your estate plan, federal law and your state law.

Third, federal estate taxes are a voluntary tax.  They are voluntary in the sense that you only pay them if you don’t plan.  There is much you can do to eliminate federal estate taxes.  Ifyou have other goals that conflict with saving taxes, the federal estate tax can still be minimized.

Fourth, every individual is entitled, under federal law, to pass a certain amount of assets without paying any federal estate tax.  In 2011 and 2012, the exemption is quite high; it’s $5 million.  You can give away up to $5 million during your lifetime or at your death without paying any federal estate taxes.  However, the exemption is set to return to $1 million in 2013 and many estates will be subject to the tax if they don’t have a comprehensive estate plan.

Fifth, there are many ways that your estate planning attorney can help you avoid the federal estate tax.  Married couples can use an AB tax minimizing plan in their trusts.  There is also life insurance, grantor annuity, personal residence and charitable trusts that are used to eliminate or minimize the federal estate tax.

It’s up to you whether your estate pays death taxes or not.  Consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

As you begin the estate planning process, there’s a lot of information to absorb.  Below, we have outlined the basics, so that you have a foundation before you begin the process.

• Every adult needs an estate plan, even an 18 year old.
• If you want to control your medical and financial future, comprehensive and legally valid estate planning documents are necessary.
• If you don’t legally document your estate plan, your state law and the court will create an estate plan for you.
• Trusted helpers are personal representatives (i.e. executors), trustees, power of attorney agents, and guardians for minor children.  You need all of these trusted helpers to act on your behalf when you cannot.
• Be sure to ask permission before appointing trusted helpers and name back-up trusted helpers, as well.
• Let your trusted helpers know where you keep your estate planning documents and other important papers.  In addition, make sure that they know how to contact your estate planning attorney for guidance.
• Update your estate planning documents on a regular basis, every three to five years or upon the occurrence of a significant event such as a move to a new state, a new child, a new marriage, or a divorce.
• Consult with a qualified estate planning attorney for the design, drafting, execution and funding of your estate plan.   Do-it-yourself estate plans are typically doomed to fail.
• You absolutely need a will, health care power of attorney, HIPAA release and financial power of attorney.
• You are strongly encouraged to execute a living will, organ donation authorization and revocable living trust.
• Disclose personal family and financial information to your estate planning attorney, even if you’re not sure if it’s important or you’re ashamed of the information.  Know that your attorney needs this information to properly design your estate plan and all conversations are kept confidential.  Your attorney will not judge you or your loved ones.

If you don’t have a basic up-to-date, legally valid estate plan in place, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

A living will is an optional estate planning document.  Most people want a living will because they don’t want to be hooked up to machines if they are in an irreversible coma or persistent vegetative state.  It’s not fun to think about, but your action now can prevent a lot of suffering and keep peace in your family later.  Here are the living will facts.

• A living will is typically part of a comprehensive estate plan.
• It’s an advanced medical directive, meaning that you make a decision now about a potential future situation.
• A living will is informed consent.  In fact, it’s clear and convincing evidence of your intent.
• Terri Schiavo didn’t have her wishes in writing.  She did NOT have a living will.  Because her parents didn’t want life support disconnected she was kept alive, while brain dead, for 15 years.
• Your health care agent or family members cannot override your living will, even if they disagree with your decision.
• Let your loved ones know that you have a living will and where you keep it (and where you keep your other important documents).
• Consider the use of an online document storage system such as Docubank (www.docubank.com) so that your living will and other health care documents are always available.
• In addition to a living will, you also need a health care power of attorney and a HIPAA release.
• The health care power of attorney authorizes your chosen agent to make health care decisions on your behalf if you cannot give informed consent.
• The HIPAA release authorizes medical personnel to communicate with your agent.  For example, they may discuss whether you are in an irreversible coma or persistent vegetative state, making your living will effective.
• Advanced medical directives are informed consent and cannot be overridden by your agent.

If you don’t have a living will in place, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

If your doctors determine that you are in an irreversible coma or persistent vegetative state, and if you don’t want to be kept alive with medical heroics such as life support, you should sign a living will.  The U.S. Supreme Court has ruled that a living will is clear and convincing evidence of an individual’s intent to withhold consent for heroic medical treatment, including life support machines.  Without a living will, your loved ones will have to make the decision regarding life support.  That may lead to a family battle and you not getting what you want.

Terri Schiavo:  15 Years on Life Support

Terri Schiavo was a young woman living in Florida with her husband, Michael, when she collapsed in their home.  Michael called 911 and Terri was rushed to the hospital; she was hooked up to life support machines.  Like Nancy Cruzan (discussed in part one of this article), Terri did not have a living will, but she had expressed that she didn’t want to be hooked up to machines to artificially extend her life.

The attending physicians made it clear that Terri was in a persistent vegetative state and would not improve.  Her husband sought to have life support removed.  Terri’s parents disagreed.

Years of court battles ensued.  You likely saw news coverage.

Terri was finally removed from life support 15 years after she collapsed in her home.  She died shortly thereafter.

You Need a Living Will

If you don’t want medical heroics at the very end of life, when there is no coming back, execute a living will.  Chat with the adults in your family.  Let your loved ones know how you feel, andlet them know that you’ve signed a living will.

If either you or your loved ones don’t have living wills, consult a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

If your doctors determine that you are in an irreversible coma or persistent vegetative state, and if you don’t want to be kept alive with medical heroics such as life support, you should sign a living will.  The U.S. Supreme Court has ruled that a living will is clear and convincing evidence of an individual’s intent to withhold consent for heroic medical treatment, including life support machines.  Without a living will, your loved ones will have to make the decision regarding life support.  That may lead to a family battle and you not getting what you want.

Nancy Cruzan

The two most well known life support/right to die cases are those of Nancy Cruzan and Terri Schiavo.  After being injured in a car accident, Nancy Cruzan was kept alive with artificial hydration and nutrition for nearly eight years.

After the first four years and the realization that Nancy was never going to get better, her parents and husband wanted to have the life support removed, but the state of Missouri disagreed.  The case went on for years, and made it all the way to the Supreme Court.

The Court ruled that a living will is clear and convincing evidence of the desire to not be kept alive with life support machines if an individual is in a persistent vegetative state.  Nancy didn’t have a living will, therefore, the state, at that time, was permitted to keep her on life support since there was no clear and convincing evidence presented.

After the Court’s ruling, Nancy’s parents and husband submitted additional evidence which finally constituted “clear and convincing” evidence of her desire, and she was removed from life support.  She died 19 days later – 8 years after her car accident.

If you don’t have an up-to-date living will, consult with a qualified estate planning attorney so that you never share the same fate as Nancy Cruzan.  Please read part 2 of this article, wherein we discuss Terri Schiavo’s life support/right to die case.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Your estate plan is something you need to periodically review, and the new year is a good time to schedule a moment to review the various aspects of your plan. Scheduling an appointment to talk to your attorney is also a good idea, especially given the changing legal and tax landscape that can affect you.

Tip 1: Update your will. A last will and testament is not a document that, once created, you should just leave gathering dust. Whenever you go through a major life event, such as getting married, welcoming a new child or going through a divorce, you should update your will to reflect the new situation. You can do it by adding an amendment, known as a codicil, or create an entirely new will.

Tip 2: Update your medical directives. Along with your will,  you should also update any medical directive you’ve made.  For example,if  you’ve named a health care proxy or durable power of attorney, make sure the person you’ve selected is still the person you want. If you decide to select someone new, make sure you create a new document that meets all state requirements.

Tip 3: Review your retirement accounts and any other instruments that allow you to choose your own beneficiary. It’s fairly common for people to set up retirement accounts, 401(k) accounts or insurance accounts that name a beneficiary and then quickly forget about who that beneficiary is. If it’s been a few years since you looked over your beneficiary designations, take some time to review and update if necessary.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Take a look at the following information to learn 9 cool things that estate planning can do for you.  If you have any questions, or if you’d like to begin creating your estate plan, meet with an estate planning attorney.

Estate Planning will:

• Give you control over who will get financial support during any period that you are incapacitated, as well as who will receive your assets after your death;
• Prepare for your child’s future by planning for college, protecting assets they will inherit, and naming guardians;
• Protect assets from creditors and predators;
• Make sure that your family has enough assets to pay bills after your death by analyzing saving and insurance needs;
• Give you control over who will handle your affairs after your death so that your private financial and family affairs remain private;
• Protect you during incapacity so court intervention is avoided and you stay in control by appointing agents and trustees to support you with financial management and health care decisions;
• Plan for long term care, college, and retirement costs;
• Minimize your estate tax responsibilities and reduce fees; and,
• Protect your family business from creditors and best ensure that it makes the transition to the next generation.

If you have yet to begin your estate planning, now is the time to do so. If you choose not to plan, you will have no control over how your affairs are handled. An estate planning attorney can work with you so that you’re able to achieve all of your planning goals.  You will find that with an estate plan in place, you’re able to live a less stressful life, because you will have confidence that your affairs are already in order.

If you have questions about how estate planning can individually help you, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

If you’re just beginning to think about creating an estate plan, there are 3 tips that can help you along the way.  These tips will help you have a good plan in place so that your needs are met.  Take a look at the following information to learn more.  If you have any questions, or if you’d like to get guidance on your individual estate plan needs, contact an estate planning attorney.

• Consult with a qualified estate planning attorney

Work with a qualified estate planning attorney.  While legally, you can create your own legal documents or download them from the internet, it’s not recommended.  Do-it-yourselfers often find that their estate plans don’t work and they end up paying much more in the long run.

• Consider using more than just a will

A will is a powerful estate planning tool that allows you to prepare for the future.  Unfortunately, it won’t allow you to plan for all of your needs.  Do you want to protect your assets? Are you looking to plan for possible disability?  Do you want to avoid probate?  In order to achieve these needs, you will need other estate planning tools.  Your estate planning attorney will explain the benefits of a revocable living trust, living will, powers of attorney for health care and finances, and organ donation authorizations.

• Keep your plan neat and organized

Make sure that your plan is easily accessible.  Once you have a plan in place, make sure that it’s used, when needed.  You should also keep your files in a safe place so that they’re free from damage or theft.  Tell your loved ones where you plan to store all of your documents.

If you’re ready to begin your estate planning, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Many people who choose to hold off on their estate planning are often doing so because they have no idea where to begin.  Estate planning issues can seem overwhelming, especially if you’ve never really given it much thought.  If you have yet to meet with an attorney to develop your estate plan, take a look at the information below.  If you have any questions about the estate planning process, contact an estate planning attorney for more information and personal guidance.

You have the opportunity to work with an experienced attorney throughout the entire planning process.  It’s important to choose an attorney who not only has the legal knowledge needed to create a comprehensive individualized estate plan, but one who also makes you comfortable about the experience.

When you first meet with an estate planning attorney, you will be able to discuss your individual concerns, questions, and goals.  Your attorney will ask you a lot of questions to get a better idea of the type of planning that needs to be done and how to best advise you.  It’s important that you answer all questions truthfully and with care so that you get the best estate plan for your needs.

Once you get the help of an attorney, you will realize that planning isn’t as scary or stressful as it may seem.  You will receive the guidance needed to handle all of your planning affairs.  You will also be able to build a lasting relationship, so that you can get estate planning legal advice in the future.

It is in your best interest, to take the time to schedule an estate planning consultation.  If you have any questions about your own estate planning needs, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.